UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry Into a Material Definitive Agreement.
The information set forth in Item 5.02 below is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 5.02 below is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Employment Agreement
On August 9, 2023 and effective as of January 1, 2023 (the “Effective Date”), Courtside Group, Inc. (the “Company”) entered into a new employment agreement with Sue McNamara, the Company’s current Chief Revenue Officer (the “Employment Agreement”). The term of the Employment Agreement is for two years from the Effective Date at an annual salary of $325,000. Ms. McNamara is eligible to earn an annual fiscal year performance bonus for each whole or partial fiscal year of her employment period with the Company in accordance with the Company’s ABP (as defined below) applicable to the Company’s executive officers and other employees and expected to be approved by the Company’s board of directors (the “Board”). Ms. McNamara’s “target” performance bonus shall be 100% of her average annualized base salary during the fiscal year for which the performance bonus is earned. Pursuant to the Employment Agreement, Ms. McNamara was granted: (i) 125,000 restricted stock units of the Company (the “Company RSUs”), and (ii) 75,000 restricted stock units of LiveOne, Inc. (“LiveOne”), the Company’s parent (the “LiveOne RSUs” and together with the Company RSUs, the “RSUs”). The Company RSUs were granted pursuant to the Company’s 2022 Equity Incentive Plan (the “Company EIP”), and the LiveOne RSUs were granted pursuant to LiveOne’s 2016 Equity Incentive Plan, as amended. 50% of the RSUs shall vest on the one year anniversary of the Effective Date (the “Initial Vesting Date”), and the remaining 50% of the RSUs shall vest on the two year anniversary of the Effective Date (the “Subsequent Vesting Date” and together with the Initial Vesting Date, the “Vesting Dates”), subject to Ms. McNamara being continuously employed by and being in good standing with the Company and the Employment Agreement being in effect, in each case through each applicable Vesting Date (except as provided below). Each vested Company RSU shall be settled by delivery to Ms. McNamara of one share of the Company’s common stock promptly following the applicable Vesting Date (a “PC1 Settlement Date”). Each vested LiveOne RSU shall be settled by delivery to Ms. McNamara of one share of LiveOne’s common stock promptly following the applicable Vesting Date (except as provided below). If at the time of a PC1 Settlement Date, the Company has not completed the Going Public Transaction (as defined below), the Company agreed to cause LiveOne to issue to Ms. McNamara, in lieu of the Company’s common stock that would be issued upon the settlement of any Company RSUs that would vest on such PC1 Settlement Date, such number of shares of LiveOne’s common stock for each vested Company RSU as would equal to a one to one ratio. After any settlement of any vested Company RSUs, the remaining unvested Company RSUs shall be settled in the Company’s common stock, subject to the terms of the Employment Agreement. “Going Public Transaction” means the earlier of (i) the date on which the Company consummates the direct listing of its common stock on a national stock exchange and (ii) the date of completion of any other transaction by the Company as a result of which the Company’s common stock is listed on a national stock exchange.
In the event a PC1 Change of Control (as defined in the Employment Agreement), if Ms. McNamara remains employed by the Company through the date of such PC1 Change of Control, 50% of then unvested Company RSUs shall vest in full effective immediately prior to such event. In the event a LVO Change of Control (as defined in the Employment Agreement), if Ms. McNamara remains employed by the Company through the date of such LVO Change of Control, 50% of then unvested LiveOne RSUs shall vest in full effective immediately prior to such event. The RSUs grants will be evidenced by a standard form of the Company’s or LiveOne’s restricted stock units award agreement, as applicable.
If Ms. McNamara’s employment is terminated by the Company without “Cause” or by Ms. McNamara for “Good Reason” (each as defined in the Employment Agreement, subject to the Company’s right to cure), she will be entitled to termination benefits, pursuant to which the Company will be obligated to (i) pay Ms. McNamara certain accrued obligations and to continue to pay Ms. McNamara her base salary for a period that is the lesser of (x) 6 months from the effective termination date and (y) the remaining period of the term of her Employment Agreement, and (ii) accelerate the vesting of 100% of any unvested RSUs and any other equity awards granted by the Company. The foregoing termination benefits are subject to Ms. McNamara’s delivery to the Company of an executed release of claims against it and continued compliance with her confidentiality agreement with the Company.
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The Employment Agreement contains covenants for the benefit of the Company relating to non-interference with the Company’s business after termination of employment and protection of the Company’s confidential information, certain customary representations and warranties and standard Company indemnification obligations.
The foregoing description of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated herein by reference.
The shares of the Company’s common stock and LiveOne’s common stock underlying the RSUs may be issued, if any, in a private placement that will rely upon an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder, or pursuant to the Company’s Registration Statement on Form S-8, if and when such is filed by the Company with the U.S. Securities and Exchange Commission, or LiveOne’s Registration Statement on Form S-8, as applicable.
Annual Bonus Plan
Effective as of the Effective Date, the Company adopted the 2023 Annual Bonus Plan (the “ABP”), which shall be subject to the approval of the Board or its compensation committee. Any bonuses that may be earned under the ABP shall be tied to the financial performance of the Company and the price of the Company’s common stock for the Company’s applicable fiscal year. The ABP will be administered by a committee (the “Committee”) consisting of the following three current executives of the Company as of the date of the ABP: Kit Gray, the Company’s President, Robert S. Ellin, the Company’s Executive Chairman and a director, and Aaron Sullivan, the Company’s Interim Chief Financial Officer. If for any reason any such Committee member shall be removed or is no longer serving on the Committee, the Board shall appoint a replacement member of the Committee that will be an executive officer of the Company with direct ties to the Company’s operations. The ABP provides the Company’s employees and executive officers (the “Participants”) with the opportunity to earn annual incentive compensation awards based upon the achievement of certain pre-determined performance measures during the applicable performance period. Such performance measures may differ among Participants and awards, may be in terms of Company-wide and/or individual objectives, and may include a variety of quantitative and/or qualitative metrics as set forth in the ABP and as determined by the Committee, which may include, among others, the Company’s revenue, adjusted EBITDA, stock price and the achievement of such other Company key operating metrics and such other objectives as the Committee determines, each with a specified weighting as determined by the Committee based on the recommendation of the Company’s President, subject to the Board’s or its compensation committee’s final approval of the applicable performance goals for the Company for each applicable fiscal year, the cash versus equity split of such awards and the amount of any such awards. All incentive awards payable under the ABP will be paid in cash or in the form of equity issued by the Company under the Company EIP, or both.
The Committee will have the discretion to increase, reduce, or eliminate an incentive award that would otherwise be payable to one or more Participants on the basis of the certified level of attained performance. Unless the Committee determines otherwise and subject to certain exceptions, no Participant will have any right to receive payment of an award under the ABP for a performance period unless the participant remains employed with the Company through the last business day of the applicable fiscal year. Awards under the APB may be granted to Participants selected by the Committee in its sole discretion; provided, that the Company’s President, Chief Revenue Officer and Chief Content Officer shall be mandatory Participants under the ABP. The Committee may at any time amend, suspend or terminate the ABP, and subject to the approval of the Board. Subject to the approval of the ABP by the Board, the ABP contains target and maximum potential payouts, which are based on the Company reaching certain predetermined performance targets and will be in the form of cash and equity of the Company, and the applicable performance measures for the applicable fiscal years ending March 31, 2024 and 2025 (the “Fiscal Years”), and which targets may be adjusted based on individual objectives. The ABP further provides that in no event shall the actual bonuses payable under the ABP to all Participants for the applicable Fiscal Year exceed in the aggregate the dollar amount provided in the ABP, as may be subsequently adjusted by its terms.
The foregoing description of the ABP does not purport to be complete and is qualified in its entirety by reference to the full text of the ABP, which is filed as Exhibit 10.2 to this Current Report and is incorporated herein by reference.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
Description | |
| 10.1† | Employment Agreement, dated August 9, 2023, between the Company and Sue McNamara. | |
| 10.2† | The Company’s 2023 Annual Bonus Plan. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| † | Indicates a management contract or compensatory plan. |
| * | Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| COURTSIDE GROUP, INC. | ||
| Dated: August 15, 2023 | By: | /s/ Aaron Sullivan |
| Name: | Aaron Sullivan | |
| Title: | Interim Chief Financial Officer | |
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Exhibit 10.1
Courtside Group, Inc.
335 N. Maple Drive, Suite 127
Beverly Hills, CA 90210
August 9, 2023
Ms. Sue McNamara
235 E. 22nd St., Apt 16F
New York, NY 10010
Dear Sue:
This letter sets forth the agreement (this “Agreement”), dated as of the date set forth above and effective as of January 1, 2023 (the “Effective Date”), by and between Courtside Group, Inc. (dba Podcast One) (“Company”) and you (“Executive”) with respect to Executive’s engagement by Company to render services as more specifically set forth below.
1. Engagement: Company wishes to employ Executive as its Chief Revenue Officer (“CRO”). In connection therewith, Executive shall report directly to Company’s Executive Chairman and Company’s President, or such other person as designated by Company’s board of directors (the “Board”). Executive’s principal place of business will be in New York, New York, including a remote work arrangement. Executive shall travel to Company’s other offices as Company and/or LiveOne, Inc. (a Delaware corporation and Company’s parent) (“LiveOne”) shall maintain from time to time, as required to perform her services hereunder or as reasonably required by Company or LiveOne, at Company’s expense (comfort plus travel and accommodations) and in accordance with the generally applicable policies and procedures of Company, subject to presentation of reasonably detailed expense statements or vouchers and such other information as Company may reasonably require. As a condition of employment, Executive shall execute and comply with the Confidentiality, Non-Interference and Invention Assignment Agreement attached hereto as Exhibit A (“Confidentiality Agreement”).
2. Term: Executive shall be employed for a period of two (2) years, commencing on the Effective Date and ending on and inclusive of the second (2nd) anniversary of the Effective Date, unless terminated earlier pursuant to paragraph 6 of this Agreement (the “Term”).
3. Compensation: (a) Salary. During the Term, Company shall pay to Executive a cash base salary of $325,000 per annum starting on the Effective Date and continuing until end of the Term (the “Base Salary”). During the Term, the Board (or the Compensation Committee thereof) shall review the Base Salary not less frequently than on an annual basis and may increase (but not decrease, including as it may be increased from time to time) the Base Salary. Company shall pay the Base Salary to Executive in accordance with the Company’s generally applicable payroll practices for Company’s executive officers (the “Executive Officers”), but not less frequently than in equal biweekly installments.
(b) Bonus. In addition to the base salary, Executive is eligible to earn an annual fiscal year performance bonus (a “Performance Bonus”) for each whole or partial fiscal year during the Term, beginning on April 1, 2023, in accordance with Company’s annual bonus plan applicable to the Company’s executive officers, substantially the form of Exhibit B attached hereto (the “Annual Bonus Plan”), which Annual Bonus Plan is expected to be adopted by Board after the date hereof. (The Company’s fiscal year, as of the Effective Date, shall be April 1 to March 31.) Executive’s “target” Performance Bonus shall be up to one hundred percent (100%) of Executive’s average annualized base salary during the fiscal year for which the Performance Bonus is earned. Executive’s “target” Performance Bonus is referred to herein as the “Target Bonus.” The award of any Performance Bonus (or Target Bonus) shall be subject to the determination of the Bonus Committee (as defined in Exhibit B) of the amount of the Performance Bonus amount (not to exceed the maximum Target Bonus as set forth in Exhibit B) and approval of the Performance Bonus amount by the Board, based on the Company meeting or exceeding major milestones set forth on Exhibit B for each whole or partial fiscal year of the Company during the Term beginning on April 1, 2023 (collectively, the “Bonus Target Objectives”). The Performance Bonus (or Target Bonus) shall be paid to Executive in cash and/or in shares of the Company Common Stock (as defined below) with percentages as set forth in Exhibit B, at the sole discretion of the Board depending on the financial condition of the Company. The Company agrees that the Bonus Target Objectives will be no less favorable in the aggregate to Executive than the objectives established and used under the Annual Bonus Plan to determine the amount of the annual bonus payable to the other senior executive officers of the Company, such as the President, Chief Content Officer or Chief Operating Officer (“Executive Officers”) who participate in the Annual Bonus Plan; provided, that the Bonus Committee may determine the breakdown of the specific Performance Bonus objectives based on the terms of Bonus Plan. Except as otherwise provided herein: (i) depending on such performance in any particular whole or partial fiscal year, and on the criteria set forth in the Annual Bonus Plan, the actual amount of the Performance Bonus for that fiscal year may be less than, equal to, or greater than the Target Bonus; (ii) Company shall pay each Performance Bonus to Executive at the same time that annual cash bonuses are paid to the other Executive Officers, but in no event later than the fifteenth (15th) day of the third month following the end of the applicable fiscal year for which the Performance Bonus is earned; (iii) Executive shall be eligible to earn a Performance Bonus from the beginning of the fiscal year on April 1, 2023 and ending on March 31, 2024, and from the beginning of the fiscal year on April 1, 2024 and ending on December 31, 2024; and (iv) Executive shall be entitled to receive, and shall receive any Performance Bonus (or pro rata thereof) earned and awarded, if any, even if Executive is not employed on the date on which annual bonuses for the applicable fiscal year are paid (or are payable in accordance with this Section 5.2), so long as Executive earned such Performance Bonus during the fiscal year while Executive was actually employed. For clarity, this Section 3(b)(iii) means that if, at the end of Term, Executive’s employment with the Company is not renewed for any reason, Executive shall still receive Executive’s Performance Bonus earned and awarded, if any, up to the date of Executive’s separation from Company, regardless of whether Executive is employed by the Company on the date when cash and stock bonuses for the applicable fiscal year are paid.
(c) Equity Grant. (i) Subject to approval by the Board, and the Company completing the Going Public Transaction (as defined below), the Company shall grant to Executive, as soon as practicable following the Effective Date, but no later than thirty (30) days following the date of this Agreement, an initial equity grant (the “PC1 Equity Grant”) consisting of: one hundred and twenty-five thousand (125,000) restricted stock units of the Company (the “PC1 RSUs”). The PC1 Equity Grant shall be made under the Company’s 2022 Equity Incentive Plan (as amended, modified or restated from time to time, the “2022 PC1 EIP”) and will be evidenced by the Company’s standard form of Award Agreement (as defined in the 2022 PC1 EIP) between Executive and the Company (the “PC1 Award Agreement”). Subject to Section 6, the PC1 RSUs shall vest as follows: (i) 50% of the RSUs shall vest twelve (12) months from the Effective Date (the “Initial Vesting Date”), and (ii) the remaining 50% of the RSUs shall vest twenty-four (24) months from the Effective Date (the “Subsequent Vesting Date” and together with the Initial Vesting Date, each a “Vesting Date” and collectively, the “Vesting Dates”), provided that for each PC1 RSUs vesting tranche, Executive is continuously employed by and is in good standing with the Company and this Agreement is in effect, in each case through each applicable Vesting Date (except as otherwise provided in Section 6). Notwithstanding the foregoing or anything herein to the contrary, if Executive remains employed through the date of a PC1 Change of Control (as defined below), 50% of Executive’s then-unvested PC1 RSUs shall vest in full effective immediately prior to such PC1 Change of Control. Each respective vested PC1 RSU shall be settled by delivery to Executive of one share of the Company’s common stock, $0.00001 par value per share (the “Company Common Stock”), per vested PC1 RSU promptly after the applicable Vesting Date (each such applicable date, the “PC1 Settlement Date”). Upon and after each PC1 Settlement Date, the Company may in its sole discretion (but shall have no obligations whatsoever to do so), and to the extent permissible under applicable law and the Company’s Insider Trading Policy, allow Executive to satisfy her tax obligations arising in connection with the settlement of her vested PC1 RSUs through the sale by her in the open market of a number of shares of Company Common Stock underlying the vested and settled PC1 RSUs up to the maximum amount that would be sufficient to pay the amount of those tax obligations. Notwithstanding the foregoing, if at the time of a PC1 Settlement Date, the Company has not completed the Going Public Transaction, Company agrees that in lieu of Company Common Stock that would be issued upon the settlement of any PC1 RSUs that would vest on such PC1 Settlement Date, LiveOne shall issue Executive such number of shares of LVO Common Stock for each vested PC1 RSU (the “Exchange”) as would equal to a ratio of 125,000 divided by 125,000, and executive shall have the right to satisfy his tax obligations in connection with such settlement through the sale of LVO Common Stock in accordance with the terms of Section 3(c)(ii), and Company agrees to cause LiveOne to comply with the foregoing requirements. For the avoidance of doubt, after any settlement of any vested PC1 RSUs, the remaining unvested PC1 RSUs shall be settled in Company Common Stock, subject to the terms of this Agreement, including the foregoing sentence and the Exchange, if applicable. “PC1 Change of Control” shall have the meaning of “Change of Control” provided in the 2022 PC1 EIP, except that (i) for purposes of determining whether a PC1 Change of Control has occurred under this Agreement, (x) the acquisition of additional shares of PC1 Common Stock or LVO Common stock (as defined below) and/or convertible or voting securities of the Company or LiveOne, as applicable, by Robert Ellin, LiveOne and/or their Affiliates (as defined below) resulting in LiveOne, Mr. Ellin and/or their respective Affiliates having Beneficial Ownership (as such term is defined in the Exchange Act) of more (or less) than 50% of the total voting power of the stock of the Company or LiveOne will not be considered a PC1 Change of Control, and (y) the disposition, transfer, conveyance or sale of shares of PC1 Common Stock and/or convertible or voting securities of the Company by Robert Ellin, LiveOne and/or their Affiliates will not be considered a PC1 Change of Control (other than as a result of any Additional PC1 Change of Control (as defined below)), (ii) for purposes of the PC1 RSUs (and any other amounts payable on a PC1 Change of Control that constitute “nonqualified deferred compensation” within the meaning of Section 409A), a PC1 Change of Control shall only be deemed to occur if such transaction also constitutes a “change of control event” within the meaning of Section 409A; and (iii) notwithstanding clause (i), a consummation of a transaction described on Exhibit C attached hereto will not be considered a PC1 Change of Control. “Additional PC1 Change of Control” means the occurrence after the date of this Agreement of any of the following transactions or events with respect to the Company, whether effected through one transaction or event or through a combination or series of related, arranged, contemplated, or contemporaneous transactions or events: (A) a sale, exchange, acquisition or other transfer resulting in an acquisition by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act of 1934, as amended) (other than LiveOne or its Affiliates) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company, (B) (i) the Company merges into or consolidates with any other person (other than LiveOne or its Affiliates) or any person merges (other than LiveOne or its Affiliates) into or consolidates with the Company, after giving effect to such transaction, and/or (ii) the Company enters into other transaction or relationship which results in, in either case the stockholders of the Company (other than LiveOne or its Affiliates) immediately prior to such transaction owning less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the issuance of securities of the Company to an individual or legal entity or “group” (other than to LiveOne or its Affiliates), which issuance represents in excess of 50% of the voting securities of the Company after giving effect to such issuance, (d) the Company sells, transfers, licenses, leases or otherwise disposes or conveys (including any sale and leaseback transaction or by way of a merger) of all or substantially all of its assets to another person (other than to LiveOne or its Affiliates), or (f) any other transaction, event, arrangement, or relationship having a similar effect on control of the Company as delineated in this definition. “Going Public Transaction” means the earlier of (i) the date on which the Company consummated its direct listing of Company Common Stock on a national stock exchange and (ii) the date of completion of any other transaction by the Company as a result of which the Company Common Stock is listed on a national stock exchange. By signing this Agreement, Executive acknowledges that the Company’s Insider Trading Policy is, or if adopted after the date hereof shall be, substantially the same as LiveOne’s Insider Trading Policy and further acknowledges receipt and agrees to the terms of such Insider Trading Policy.
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(ii) Subject to approval by LiveOne’s board of directors (“LiveOne Board”), the Company shall promptly, but no later than thirty (30) days following the date of this Agreement, cause LiveOne to grant to Executive, as soon as practicable following the Effective Date, but no later than the first anniversary of the Effective Date, an initial equity grant (the “LVO Equity Grant”) of seventy five thousand (75,000) restricted stock units of LiveOne (the “LVO RSUs” and collectively with the PC1 RSUs, the “RSUs”). The LVO Equity Grant shall be made under LiveOne’s 2016 Equity Incentive Plan (as amended, modified or restated from time to time, the “2016 LVO EIP”), and will be evidenced by LiveOne’s standard form of Award Agreement (as defined in the 2016 LVO EIP) between Executive and LiveOne (the “LVO Award Agreement”). Subject to Section 6, the LVO RSUs shall vest as follows: (i) 50% of the LVO RSUs shall vest on the Initial Vesting Date, and (ii) the remaining 50% of the LVO RSUs shall vest on the Subsequent Vesting Date, provided that for each LVO RSUs vesting tranche, Executive is continuously employed by and is in good standing with the Company and this Agreement is in effect, in each case through each applicable Vesting Date (except as otherwise provided in Section 6). Notwithstanding the foregoing or anything herein to the contrary, if Executive remains employed through the date of a LVO Change of Control (as defined below), 50% of Executive’s then-unvested LVO RSUs shall vest in full effective immediately prior to such LVO Change of Control. Each respective vested LVO RSU shall be settled by delivery to Executive of one share of LiveOne’s common stock, $0.001 par value per share (the “LVO Common Stock”), per vested LVO RSU promptly after the applicable vesting date (each such applicable date, the “LVO Settlement Date”). Upon and after each LVO Settlement Date, LiveOne may in its sole discretion (but shall have no obligations whatsoever to do so), and to the extent permissible under applicable law and LiveOne’s Insider Trading Policy, allow Executive to satisfy her tax obligations arising in connection with the settlement of her vested LVO RSUs through the sale by him in the open market of a number of shares of LVO Common Stock underlying the vested and settled LVO RSUs up to the maximum amount that would be sufficient to pay the amount of those tax obligations. “LVO Change of Control” shall have the meaning of “Change of Control” provided in the 2016 LVO EIP, except that (i) for purposes of determining whether a LVO Change of Control has occurred under this Agreement, the acquisition of additional shares of LVO Common Stock and/or convertible or voting securities by Robert Ellin and/or his Affiliates (as defined below) resulting in him and/or his Affiliates having Beneficial Ownership (as such term is defined in the Exchange Act) of more (or less) than 50% of the total voting power of the stock of LiveOne will not be considered a LVO Change of Control, and (ii) for purposes of the LVO RSUs (and any other amounts payable on a LVO Change of Control that constitute “nonqualified deferred compensation” within the meaning of Section 409A), a LVO Change of Control shall only be deemed to occur if such transaction also constitutes a “change of control event” within the meaning of Section 409A. By signing this Agreement, Executive acknowledges receipt and agrees to the terms of LiveOne’s Insider Trading Policy.
(d) Tax Withholding. Company may withhold from any amounts payable hereunder, including any amounts payable pursuant to this Section 3, any applicable federal, state, and local taxes that the Company is required to withhold pursuant to any applicable law.
4. Benefits: Executive shall be eligible for those benefits which are made available to other Executive Officers, pursuant to standard Company policies, including participation in the Company’s medical insurance plan (the “Benefits”). Employee will be entitled to 20 days of vacation per year, the dates of such vacation must be approved by Company’s President or such other person to whom Executive reports pursuant to Section 1, with no rollover. Company shall promptly pay or reimburse Executive for all reasonable out-of-pocket business expenses (including without limitation comfort plus travel and accommodation costs) incurred or paid by Executive during the Term directly in connection with Executive’s performance of her duties under this Agreement on a basis appropriate to Executive’s position, upon presentation of reasonably detailed expense statements or vouchers and such other information as the Company may reasonably require and in accordance with the generally applicable policies and procedures of the Company, and in no event less favorable than that provided by the Company to any of its Executive Officers, all in accordance with the applicable policies and procedures of the Company. Business expenses incurred and not submitted for reimbursement within 60 days will not be reimbursable.
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5. Services: During the Term, Executive shall devote all of Executive’s working time, business attention, and business efforts to Company, excluding any periods for illness, incapacity, and vacations, subject to the policies established by the Compensation Committee of the Board as disclosed to Executive, except as otherwise specifically provided herein. Notwithstanding the immediately preceding sentence or anything to the contrary contained herein, during the Term Executive is permitted (a) to serve on the boards of directors, the boards of trustees, or any similar governing bodies, of any corporations or other business entities, of any charitable, educational, religious, or public service organizations, or of any trade associations, (b) to engage in charitable activities and community affairs, (c) to engage in venture investing, and (d) to manage Executive’s personal investments, in each case so long as such investments do not compete with the business of Company (except that Executive may be a holder of one percent (1%) or less of the outstanding capital stock of a competing corporation whose shares are publicly traded on a national securities exchange or through a national market system or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and do not interfere with Executive’s performance of this Agreement and which shall take first priority over all other such activities as determined in the reasonable discretion of the Board. Executive will competently perform as an employee in accordance with the duties and responsibilities assigned to Executive and the Executive will devote her full business time and energies to advance the business and welfare of the Company.
6. Termination: (a) This Agreement may be terminated by mutual agreement of the parties or by Company under the following circumstances: (x) death or Disability (as defined below) of Executive, effective immediately upon such event, or (y) for “Cause.” For the purposes hereof, “Cause” means: (i) Executive’s conviction of a felony requiring intent under the laws of the United States or any State thereof, after the exhaustion of all possible appeals, or Executive entering a plea of nolo contendere to any charge of a felony requiring intent under the laws of the United States or any State thereof, in each case excluding any Limited Vicarious Liability (as hereinafter defined); (ii) a willful and substantial refusal by Executive to perform Executive’s material duties or responsibilities assigned to Executive in accordance with the terms of this Agreement, but only if such duties or responsibilities so assigned to Executive are not inconsistent with (1) Executive’s position as CRO of the Company, or (2) any of Executive’s duties or responsibilities hereunder (including any such duties or responsibilities as set forth in, or as contemplated by, Section 1), and, in each case, excluding any such failure by reason of death, Disability, or incapacity; (iii) any material and willful violation of any written policy of the Company or LiveOne that is generally applicable to all employees or officers of the Company or LiveOne and that results or which could be reasonably expected to result in a material negative effect on the business, financial condition or business reputation of the Company or LiveOne, as determined by the Company in good faith in its reasonable sole discretion; (iv) Executive’s willful malfeasance in the performance of her duties hereunder that has a material negative effect on the business, financial condition or business reputation of the Company or LiveOne, as determined by the Company in its reasonable sole discretion; (v) Executive failing to comply with the first sentence of Section 9(a); or any other material breach of this Agreement or the Confidentiality Agreement by Executive, subject Executive’s ability to cure such breach (if capable of being cured) within twenty (20) calendar days following receipt of a written notice from the Company (email shall suffice); or (vi) Executive engaging in intentional acts of fraud, embezzlement, misappropriation of funds, misconduct, gross negligence, dishonesty (including, without limitation, theft), violence, threat of violence, sexual misconduct, unlawful or against the Company’s or LiveOne’s policies, harassment or any other activity that has resulted or could be reasonably expected to result in any material negative effect on the business or financial condition or reputation of the Company or LiveOne, as determined by the Company in good faith in its reasonable sole discretion. For the purposes hereof, the term “Disability” means Executive’s inability to perform her duties with Company on a full-time basis, even with reasonable accommodation, for thirty (30) business days during any period of twelve (12) consecutive months, or fifteen (15) consecutive business days, in each case solely as a result of incapacity due to mental or physical illness.
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(b) If Executive’s employment is terminated by the Company for Cause or by Executive for any reason other than Good Reason, then Executive is entitled to receive or otherwise to be provided, and Company shall pay or provide to Executive: (i) the Accrued Obligations, payable in accordance with Company’s payroll policies, (ii) the timely payment or timely provision of the Benefits in accordance with the terms and conditions of the applicable benefit plan through and inclusive of effective termination date. All unvested equity or equity awards awarded, granted or issued pursuant to this Agreement or otherwise by Company or LiveOne and/or their respective affiliates shall be forfeited effective as of the effective termination date. “Accrued Obligations” means the aggregate of: (a) Executive’s accrued Base Salary through and inclusive of effective termination date (disregarding any reduction thereto in violation of this Agreement); (b) Executive’s accrued vacation pay through and inclusive of effective termination date; and (c) Executive’s business expenses incurred through and inclusive of effective termination date that have not been reimbursed by Company as of effective termination date. Except as provided above, this provision shall not apply to forfeit any vested equity or vested shares of Company or LiveOne transferred to or held by or otherwise owned by Executive prior to the Effective Date.
(c) For the purposes hereof: (i) any act or omission (including any refusal or violation) by Executive is “willful” only if the same is not in good faith and is without the reasonable belief by Executive that such act or omission is in the best interests of the Company; and (ii) any act or omission by Executive based upon any authority granted pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company in each case is presumed to be in good faith and in the best interests of the Company. For the purposes hereof, “Limited Vicarious Liability” means any liability that (1) is based on acts or omissions of the Company for which Executive is responsible solely as a result of her responsibilities with the Company, where Executive was not directly involved in such acts or omissions and either had no prior knowledge of such intended acts or omissions or upon obtaining any such knowledge promptly acted reasonably and in good faith to attempt to prevent the acts or omissions causing such liability, or (2) Executive did not have a reasonable basis to believe that any applicable law was being violated by such acts or omissions. With respect to Section 6(a)(ii), (iii) and (iv), “Cause” shall not exist unless Executive fails to cure such act or omission (if capable of being cured) on or before the date twenty (20) calendar days after the date on which Executive receives such notice from the Company (email shall suffice), which shall be provided by Company on or before the date that is sixty (60) calendar days after the date on which Company becomes aware of the act or omission constituting Cause.
(d) Executive may terminate her employment with Company for Good Reason (as defined below) only by providing a written termination notice to Company on or before the date thirty (30) calendar days after the date on which Executive becomes aware of the act or omission constituting Good Reason, which shall take effect only if Company shall not cure such basis for Good Reason (if capable of being cured) within twenty (20) calendar days following receipt of such termination notice (email shall suffice) and, unless otherwise agreed to by the parties, termination shall be effective upon the expiration of such cure period, if applicable. For the purposes hereof, “Good Reason” means, without Executive’s written prior written consent (email shall suffice): (i) any material reduction in Executive’s then-current Base Salary (unless the other senior executives of Company are subject to the same reduction); or (ii) any material breach of this Agreement by Company (subject to the cure period as provided herein). For purposes of this Section 6(d), materiality shall be defined as a reduction of Executive’s then-current Base Salary of 10% of more, or any material breach of this Agreement by Company, which is not cured during the cure period as provided herein. If Executive’s employment is terminated by Executive for Good Reason or by the Company without Cause (other than as a result of the expiration of this Agreement or death or Disability of Executive), then Executive is entitled to receive or otherwise to be provided, and Company shall pay or provide to Executive: (x) the GR Accrued Obligations, payable in accordance with Company’s payroll policies, and (y) the timely payment or timely provision of the Benefits in accordance with the terms and conditions of the applicable benefit plan through the effective termination date. “GR Accrued Obligations” means the aggregate of: (a) Executive’s accrued then effective Base Salary through and inclusive of the date that is the lesser of (x) 6 months from the effective termination date (disregarding any reduction thereto in violation of this Agreement) and (y) the remaining period of the Term; (b) Executive’s accrued vacation pay through and inclusive of effective termination date; (c) 100% vesting of any unvested RSUs and (d) except as provided herein, Executive’s business expenses incurred in connection with the Company’s business in accordance with the Company’s policies and through and inclusive of effective termination date that have not been reimbursed by Company as of effective termination date.
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(e) In connection with any termination of Executive’s employment by Company without Cause or Executive for Good Reason, and as a condition of any payment by Company or acceleration of vesting of any unvested RSUs or other unvested equity as required by Section 6, each of Company and Executive shall execute and deliver to each other a mutual general release in Company’s standard and customary form and substance (including, without limitation, a full release of LiveOne and its Affiliates), and Executive’s right to payment of, and the Company’s obligations to pay, any obligations provided herein shall be subject to Executive’s execution (without revocation) of such release within the provided period or otherwise and her continued compliance with the terms of such mutual general release.
(f) If this Agreement is not terminated before the last day of the Term and prior to that date Company and Executive do not (i) enter into a mutually acceptable extension of this Agreement, or (ii) enter into a new agreement relating to Executive’s employment with Company to have effect after such date, or (iii) otherwise agree to continue Executive’s employment with Company after such date without the benefit of an agreement relating to such employment, then this Agreement shall automatically end on the last day of the Term.
(g) The termination of Executive’s employment with Company for any reason will constitute Executive’s immediate resignation from (a) any officer, director or employee position Executive has with Company, LiveOne or any of their respective affiliates, and (b) all fiduciary positions (including as a trustee) Executive holds with respect to any employee benefit plans or trusts established by Company or LiveOne. Executive agrees that this Agreement shall serve as written notice of resignation in such circumstances, unless otherwise required by any plan or applicable law.
7. No Waiver/Severability: The waiver of a breach of any term or condition of this Agreement shall not be deemed to constitute the waiver of any further breach of such term or condition or the waiver of any other term or condition of this Agreement. Nothing contained in this Agreement shall be construed as prohibiting Company or LiveOne from pursuing any other remedies available to it for any breach or threatened breach, including the recovery of money damages. If any provision of this Agreement is determined to be illegal, invalid, or unenforceable, then such determination does not affect the legality, validity, or enforceability of the other provisions of this Agreement, all of which remain in full force and effect. Each of Company and Executive agrees that in the event of any such determination Company and Executive will negotiate to modify this Agreement so as to effect the original intent of Company and Executive as close as possible to the fullest extent permitted by applicable law.
8. Notice. Each notice or other communication relating to this Agreement, in order to be effective, must be in writing, must be sent to the applicable address indicated below for the recipient (or to the then-most recent address of which the recipient has notified the sender in writing in accordance herewith), and must be sent, all costs, expenses, and fees prepaid by the sender, by (a) personal delivery, (b) first class registered mail, return receipt requested, (c) a nationally recognized courier service that provides proof of delivery (e.g., FedEx, UPS) for delivery on the first business day immediately following the day on which the notice or other communication is deposited with the courier service, or (d) via email. Each notice or communication given in accordance herewith is deemed effective: (i) upon actual receipt when delivered personally or by courier service, (ii) three (3) business days after the date on which the notice or communication is deposited with the United States Postal Service, if sent by first class registered mail (or any earlier date evidenced by the proof of delivery), or (iii) if being sent by email, upon confirmation of receipt. If to Company: to the attention of Company’s Executive Chairman and CEO, at the address of Company’s principal place of business, with a copy to (which shall not constitute notice) Sasha Ablovatskiy, Esq., Foley Shechter Ablovatskiy LLP, 1180 Avenue of the Americas, 8th Floor, New York, New York 10036. If to Executive: to the address listed as Executive’s primary residence in the human resource records and to Executive’s principal place of business.
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9. Miscellaneous. (a) This Agreement is personal to Executive and Executive may not assign or delegate this Agreement or her obligations hereunder without the prior written consent of Company. The Company may not assign or delegate this Agreement or its obligations hereunder without the prior written consent of Executive, except that the Company may assign or delegate this Agreement to any successor (whether direct or indirect, whether by purchase, merger, consolidation, operation of law, PC1 Change of Control, LVO Change of Control or otherwise) to all or substantially all of the business or assets of the Company and/or LiveOne, subject to the condition that the successor, no later than fifteen (15) days after the occurrence of such succession, executes and delivers to Executive an instrument in from and substance acceptable to Executive (such approval not to be unreasonably withheld, conditioned or delayed) pursuant to which the successor explicitly assumes and agrees to perform, comply with, and otherwise be bound by this Agreement in the same manner and to the same extent that the Company would be required to do so if no such succession had occurred. Subject to the immediately preceding sentence, this Agreement is binding upon and inures to the benefit of the Company and LiveOne and its permitted successors and permitted assigns. As used in this Agreement, the term “Company” means the Company as hereinbefore defined and any successor to is business or assets as aforesaid that assumes and agrees to perform this Agreement, whether by operation of law or otherwise.
(b) This Agreement shall be governed by the laws of the State of California applicable to agreements made and performed wholly therein (excluding any conflict of laws principles of that State that would result in the application of the laws of any jurisdiction other than State of California) govern all matters in connection with, relating to, or arising from this Agreement. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against a party hereto in any state or federal courts located in the City of Los Angeles, State of California, and each party consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. Executive acknowledges and agrees that Company has made no representations or offers other than those set forth herein. This Agreement is the final expression of the agreement between the Company and Executive. This Agreement may be amended at any time, but only by written instrument signed by the parties hereto. The Confidentiality Agreement executed by the Executive shall be considered as addendum(s) hereto. This Agreement inures to the benefit of and is enforceable by Executive’s legal representatives, heirs, or legatees. The following provisions survive the expiration or termination of the Term: (including any termination by reason of Executive’s breach of this Agreement): Section 3(d) (Tax Withholding), Section 6 (Termination), and Sections 7 through 9 (inclusive). The Confidentiality Agreement shall survive the expiration or termination of the Employment Period and the Term on the terms thereof. Each party shall pay the fees and expenses of her or its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. This Agreement may be executed in multiple counterparts, each of which constitutes an original and all of which together constitute one and the same instrument. A manually executed counterpart of this Agreement delivered by means of e-mail as a Portable Document Format file (“.pdf”) (or in any present or future file format intended to preserve the original graphic and pictorial appearance of a document), or by means of electronic or facsimile transmission, constitutes the valid and effective execution and delivery of this Agreement for all purposes and has the same force and effect for all purposes as the personal delivery of a manually executed counterpart bearing an original ink signature.
[Signature page follows]
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By signing below, each of Company and Executive acknowledges that it or she has carefully read, fully understands, and accepts and agrees to be bound by the provisions of this Agreement.
| COURTSIDE GROUP, INC. | ||
| By: | /s/ Kit Gray | |
| Name: | Kit Gray | |
| Title: | President | |
| Executive: | ||
| /s/ Sue McNamara | ||
| Sue McNamara | ||
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EXHIBIT A
CONFIDENTIALITY, NON-INTERFERENCE AND INVENTION ASSIGNMENT AGREEMENT
As a condition of my becoming employed by, or continuing employment with, Courtside Group, Inc., a Delaware Corporation (the “Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following. All initially capitalized terms used but not defined herein have the respective meanings given to such terms in the employment offer letter between the Company and me dated as of August 9, 2023 (as amended, modified or restated, the “Employment Agreement”)
1. Confidential Information
1.1 Company Group Information. I acknowledge that, during the course of my employment, I will have access to non-public information about the Company, LiveOne and their respective direct and indirect subsidiaries and affiliates (collectively, the “Company Group”) and that my employment with the Company shall bring me into close contact with confidential and proprietary information of the Company Group. In recognition of the foregoing, I agree, at all times during the term of my employment with the Company and for the five (5) year period following my termination of my employment for any reason, to hold in confidence, and not to use, except for the benefit of the Company Group, or to disclose to any person, firm, corporation, or other entity without written authorization of the Company or except as expressly permitted herein, any Confidential Information that I obtain or create. This Agreement is made to the extent that one or more obligations do not conflict with California Business and Professions Code § 16600, et seq. (“Section 16600”). If a court with appropriate jurisdiction over the parties hereto determines by a final non-appealable decision, that one or more obligations of this Agreement conflicts with Section 16600 or other applicable statutory or common law, Section 16600 or other applicable law shall prevail solely with respect to such provision of this Agreement that directly conflicts with Section 16600 or other applicable law, and Section 16600 or other applicable law shall apply solely with respect to such conflicting provision. Notwithstanding the foregoing, Section 6(e) of the Employment Agreement shall continue to apply as a condition of any payment required by such Section 6(e). I further agree not to make copies of such Confidential Information except as authorized by the Company, or except as permitted herein, or as otherwise necessary to fulfill my duties to the Company. For the purposes hereof, “Confidential Information” means information that the Company Group has developed, acquired, created, compiled, discovered, or owned or will develop, acquire, create, compile, discover, or own, that has value in or to the business of the Company Group that is not generally known and that the Company wishes to maintain as confidential. I understand that Confidential Information includes, but is not limited to, any and all non-public information that relates to the actual or anticipated business and/or products, research, or development of the Company, or to the Company’s technical data, trade secrets, or know-how, including, without limitation, proposals and development work for television programs, formats, copyright works, research, product plans, or other information regarding the Company’s products or services and markets, customer lists, and customers (including, without limitation, customers of the Company on whom I called or with whom I may become acquainted during the term of my employment), software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances, and other business information disclosed by the Company either directly or indirectly in writing, orally, or by drawings or inspection of premises, parts, equipment, or other Company property. Notwithstanding the foregoing: (a) Confidential Information shall not include (i) any of the foregoing items that are, or become, publicly known through no unauthorized disclosure by me, (ii) any of the foregoing items lawfully disclosed to me free of restriction from a source that was not legally or contractually prohibited from disclosing such item, or (iii) any of the foregoing items or other information that I had or owned prior to my employment with the Company; and (b) I am entitled to disclose Confidential Information (i) as agreed to in writing by the Company (other than as authorized in my capacity as an officer of the Company), (ii) within the Company Group to the extent necessary to perform my duties under this Confidentiality, Non-Interference and Invention Assignment (this “Agreement” or this “Confidentiality Agreement”), (iii) to my attorneys and accountants on a need-to-know basis in connection with asserting my rights under the Employment Agreement or this Agreement (provided such attorneys and accountants agree in writing to not otherwise disclose such Confidential Information, (iv) if reasonably necessary to defend my interests, or (v) to make any claim, pursuant to a litigation, arbitration or mediation involving this Agreement, provided, that with respect to clauses (iv) and (v) in any such defense, litigation, arbitration, mediation or any other proceeding, the parties agree to enter into a reasonable confidentiality order or agreement to preserve the confidentiality of any such Confidential Information used in such defense, litigation, arbitration, mediation or any other proceeding.
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1.2 Notwithstanding anything to the contrary contained herein, I am permitted to disclose any Confidential Information if and to the extent I am required to do so by applicable law, including without limitation by, or pursuant to any order of, any court, tribunal, or other governmental, judicial, arbitral, administrative, or regulatory authority, agency, or instrumentality. In the event I am so required to disclose any Confidential Information, I will, if permitted pursuant to applicable law, inform such requesting party of the confidentiality obligations hereunder and give the Company prompt prior notice thereof so that the Company Group, at its sole cost and expense, may seek an appropriate protective order and/or waive compliance with the confidentiality provisions of this Agreement.
1.3 Former Employer Information. I represent that my performance of all of the terms of this Confidentiality Agreement as an employee of the Company has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge, or data acquired by me in confidence or trust prior or subsequent to the commencement of my employment with the Company, and I will not disclose to any member of the Company Group, or induce any member of the Company Group to use, any developments, or confidential or proprietary information or material I may have obtained in connection with employment with any prior employer in violation of a confidentiality agreement, nondisclosure agreement, or similar agreement with such prior employer.
2. Developments
2.1 Developments Retained and Licensed. I hereby represent and warrant that there are not any developments, original works of authorship, improvements, or trade secrets which were created or owned by me prior to the commencement of the Employment Period (collectively referred to as “Prior Developments”). If the foregoing representation and warranty is breached, and during any period during which I perform or performed services for the Company both before or after the date hereof (the “Assignment Period”), I incorporate or have incorporated into a Company product, program, service or other work a Prior Development owned by me or in which I have an interest, then I hereby grant the Company a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Development, to the extent of my interest therein, as part of or in connection with such product, program, service or work.
2.2 Assignment of Developments. I hereby assign to the Company all my right, title and interest throughout the world (if any) in and to any and all (i) inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions and reexaminations thereof, (ii) trademarks, service marks, trade dress, logos, titles and working titles, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) copyrightable works, all copyrights, and all applications, registrations and renewals in connection therewith, (iv) trade secrets and confidential business information (excluding general industry knowledge and contacts) and all ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, technology, systems, and business and marketing plans and proposals, (v) rights in and to computer software (including object code, source code, data and related documentation), (vi) Internet Web sites, including domain name registrations and content and software included therein, (vii) other proprietary rights, including, without limitation, original works of authorship, content, dialogue, plots, scripts, scenarios, music programming, formats, graphics, productions, products, programs, services, concepts, moral rights, rights to characters, actions, acts, gags, routines, materials, ideas, names, likeness, image, personality, publicity etc., (viii) rights to exploit, collect remuneration for, and recover for past infringements of any of the foregoing and (ix) copies and tangible embodiments thereof (in whatever form or medium), whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice or cause to be conceived or developed or reduced to practice, or have conceived or developed or reduced to practice or have caused to be conceived or developed or reduced to practice, during the Employment Period, whether or not during regular working hours, in each case only if the applicable item (A) relates at the time of conception or development to the actual or demonstrably proposed business or research and development activities of the Company; (B) results from or relates to any work performed by me for the Company or any of its Affiliates; and (C) is developed through the use of Confidential Information and/or resources of the Company (collectively referred to as “Developments”). I further acknowledge that all Developments which are or were made by me (solely or jointly with others) during the Assignment Period are “works made for hire” as to my contribution (to the greatest extent permitted by applicable law) for which I am, in part, compensated by my salary, unless regulated otherwise by law, but that, in the event any such Development is deemed not to be a work made for hire, I hereby assign any right, title and interest throughout the world in any such Development to the Company or its designee. If any Developments cannot be assigned, I hereby grant to the Company an exclusive, assignable, irrevocable, perpetual, worldwide, sublicensable (through one or multiple tiers), royalty-free, unlimited license to use, make, modify, sell, offer for sale, reproduce, distribute, create derivative works of, publicly perform, publicly display and digitally perform and display such work in any media now known or hereafter known. Outside the scope of my service, whether during or after my employment with the Company, I agree not to (x) modify, adapt, alter, translate, or create derivative works from any such work of authorship or (y) merge any such work of authorship with other Developments. To the extent rights related to paternity, integrity, disclosure and withdrawal (collectively, “Moral Rights”) may not be assignable under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, I hereby irrevocably waive such Moral Rights in and to all or any Developments and consent to any action of the Company Group that would violate such Moral Rights in the absence of such consent. I understand that the provisions of this Confidentiality Agreement requiring assignment of Inventions to the Company do not apply to any invention which qualifies fully under the provisions of Section 2870 of the California Labor Code (attached hereto as Schedule A). I will advise the Company promptly in writing of any inventions that I believe meet the criteria in Section 2870 of the California Labor Code and I bear the full burden of proving to the Company Group that an invention qualifies fully under Section 2870 of the California Labor Code. I acknowledge receipt of this Confidentiality Agreement and of written notification of the provisions of Section 2870 of the California Labor Code.
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2.3 Maintenance of Records. I agree to keep and maintain adequate and current written records of all Developments made by me (solely or jointly with others) during the Assignment Period. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, and any other format. The records will be available to and remain the sole property of the Company at all times. I agree not to remove such records from the Company’s place of business except as expressly permitted by Company policy, which may, from time to time, be revised at the sole election of the Company for the purpose of furthering the business of the Company.
2.4 Intellectual Property Rights. I agree to reasonably assist the Company, or its designee, at the Company’s expense, in every way to secure the rights of the Company in the Developments and any copyrights, patents, trademarks, service marks, database rights, domain names, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which the Company shall deem reasonably necessary in order to apply for, obtain, maintain and transfer such rights and in order to assign and convey to the Company the sole and exclusive right, title and interest in and to such Developments, and any intellectual property or other proprietary rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the Assignment Period until the expiration of the last such intellectual property right to expire in any country of the world; provided, however, the Company shall reimburse me for my reasonable expenses incurred in connection with carrying out the foregoing obligation. If the Company is unable because of my mental or physical incapacity or unavailability for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Developments or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead only to execute and file any such applications or records and only to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters patent or registrations thereon with the same legal force and effect as if originally executed by me. I hereby waive and irrevocably quitclaim to the Company any and all claims, of any nature whatsoever, which I now or hereafter have for past, present or future infringement of any and all proprietary rights assigned to the Company hereunder.
3. Returning Company Group Documents. I agree that, at the time of termination of my employment with the Company for any reason, or earlier if reasonably requested, I will deliver to the Company (and will not keep in my possession, recreate, or deliver to anyone else) any and all Confidential Information and all other documents, materials, information, and property developed by me pursuant to my employment or otherwise belonging to the Company. I agree further that any property situated on the Company’s premises and owned by the Company (or any other member of the Company Group), including disks and other storage media, filing cabinets, and other work areas, is subject to inspection by personnel of any member of the Company Group at any time with or without notice. Notwithstanding the foregoing, I will be permitted to retain my rolodex (whether in written or electronic form (e.g. Microsoft Outlook Contacts)) and my personal files and memorabilia, except to the extent any of such contains Confidential Information.
4. Disclosure of Agreement. As long as it remains in effect and during the Post-Termination Non-Interference Period, I will disclose the existence of this Confidentiality Agreement and my obligations hereunder to any prospective employer, partner, co-venturer, investor, or lender prior to entering into an employment, partnership, or other business relationship with such person or entity.
5. Restrictions on Interfering
5.1 Non-Interference. During the period of my employment with the Company (the “Employment Period”) and the Post-Termination Non-Interference Period, I shall not, directly or indirectly for my own account or for the account of any other individual or entity, engage in Interfering Activities.
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5.2 Definitions. For purposes of this Confidentiality Agreement:
(a) “Business Relation” shall mean any current or prospective client, customer, licensee, account, supplier or other business relation of the Company Group, or any such relation that was a client, customer, licensee, account, supplier, or other business relation within the six (6) month period prior to the expiration of the Employment Period, in each case, to whom I provided services, or with whom I transacted business.
(b) “Interfering Activities” means (A) encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any Person employed by, or providing consulting, podcasting or any other services to, any member of the Company Group (each, a “Restricted Associate”) to terminate such Person’s employment or services (or in the case of a consultant, materially reducing such services) with the Company Group, provided that the foregoing shall not be violated by general advertising not targeted at employees or consultants of any member of the Company Group; or (B) encouraging, soliciting, or inducing, or in any manner attempting to encourage, solicit, or induce, any Business Relation to cease doing business with or reduce the amount of business conducted with the Company Group, or in any way interfering with the relationship between any such Business Relation and the Company Group. Notwithstanding the foregoing, for the purposes hereof the term “Interfering Activities” excludes my taking all or any of the following actions, whether for my account or benefit or for the account or benefit of any other Person: (x) hiring any Restricted Associate or engaging any Restricted Associate to otherwise render services (whether consulting or otherwise), so long as in connection therewith I do not knowingly encourage, induce, or solicit, or knowingly attempt to encourage, induce, or solicit, the respective Restricted Associate in violation of the above clause (A) of this definition; (y) engaging in, accepting, or otherwise conducting business with any Business Relation, so long as in connection therewith I do not knowingly encourage, solicit, or induce, or knowingly attempt to encourage, solicit, or induce, the respective Business Relation in violation of the above clause (B) of this definition; or (z) communicating, or any Person at my direction communicating, to any Persons, including, without limitation, any Restricted Associate or any Business Relation, by any means, method, media, or format now or hereafter known (including, without limitation, via any present or future social media service, such as, without limitation, LinkedIn, Facebook, or Twitter), any change in my employment, including, but not limited to, the cessation of my employment with the Company or my employment with any Person other than the Company.
(c) “Person” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust (charitable or non-charitable), unincorporated organization, or other form of business entity.
(d) “Post-Termination Non-Interference Period” means the period commencing on the date of the termination of my employment with the Company for any reason and ending on the twelve (12) month anniversary of such date of termination.
6. Reasonableness of Restrictions. I acknowledge and recognize the highly competitive nature of the Company’s business, that access to Confidential Information renders me special and unique within the Company’s industry, and that I will have the opportunity to develop substantial relationships with existing and prospective clients, accounts, customers, consultants, contractors, investors, and strategic partners of the Company Group during the course of and as a result of my employment with the Company. In light of the foregoing, I recognize and acknowledge that the restrictions and limitations set forth in this Confidentiality Agreement are reasonable and valid in geographical and temporal scope and in all other respects and are essential to protect the value of the business and assets of the Company Group. I acknowledge further that the restrictions and limitations set forth in this Confidentiality Agreement will not materially interfere with my ability to earn a living following the termination of my employment with the Company and that my ability to earn a livelihood without violating such restrictions is a material condition to my employment with the Company.
7. Independence; Severability; Blue Pencil. Each of the rights enumerated in this Confidentiality Agreement shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to the Company Group at law or in equity. If any of the provisions of this Confidentiality Agreement or any part of any of them is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of this Confidentiality Agreement, which shall be given full effect without regard to the invalid portions.
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8. Injunctive Relief. I expressly acknowledge that any breach or threatened breach of any of the terms and/or conditions set forth in this Confidentiality Agreement may result in substantial, continuing, and irreparable injury to the members of the Company Group. Therefore, I hereby agree that, in addition to any other remedy that may be available to the Company, any member of the Company Group shall be entitled to seek injunctive relief, specific performance, or other equitable relief by a court of appropriate jurisdiction in the event of any breach or threatened breach of the terms of this Confidentiality Agreement without the necessity of posting of a bond.
9. General Provisions.
9.1 Governing Law. Except where preempted by federal law, all matters in connection with, relating to, or arising from this Confidentiality Agreement, including, without limitation, the validity, interpretation, construction, and performance of this Confidentiality Agreement, is governed by and is to be construed under the laws of the State of California applicable to agreements made and to be performed in that state, without regard to conflict of laws rules of the State of California that would result in the application of the laws of any jurisdiction other than the State of California. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Confidentiality Agreement may be brought against a party hereto in any state or federal courts located in the City of Los Angeles, State of California, and each party consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.
9.2 Entire Agreement. This Confidentiality Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions and communications between the Company and me relating to the same. No modification or amendment to this Confidentiality Agreement, nor any waiver of any rights under this Confidentiality Agreement, will be effective unless in writing and signed and delivered by each of the Company and me. Any subsequent change or changes in my duties, obligations, rights, or compensation will not affect the validity or scope of this Confidentiality Agreement.
9.3 Successors and Assigns. Notwithstanding anything to the contrary contained in the Employment Agreement or in this Confidentiality Agreement, each party is prohibited from assigning or delegating all or any portion of this Confidentiality Agreement except in compliance with this Section 9.3 in connection with an assignment or delegation of the Employment Agreement that is effected in compliance with Sections 9(a) of the Employment Agreement. Subject to the two immediately preceding sentences, this Confidentiality Agreement will be binding upon my heirs, executors, administrators, and other legal representatives and will be binding upon and for the benefit of the Company, its successors, and its assigns.
9.4 Survival. The provisions of this Confidentiality Agreement shall survive the termination of my employment with the Company and/or the assignment, in compliance with the requirements hereof, of this Confidentiality Agreement by the Company to any successor in interest or other assignee, in each case subject to the temporal limitations contained herein.
9.5 Construction. Each party hereto has had an adequate opportunity to have this Confidentiality Agreement reviewed by counsel. If an ambiguity or question of intent or interpretation arises, this Confidentiality Agreement shall be construed as if drafted jointly by the parties hereto. This Confidentiality Agreement shall be construed without regard to any presumption, rule or burden of proof regarding the favoring or disfavoring of any party hereto by virtue of the authorship of any of the provisions of this Confidentiality Agreement. In the event any of the provisions of this Confidentiality Agreement conflict with any of the provisions of the Employment Agreement, the respective provisions of the Employment Agreement govern and control.
[SIGNATURE PAGE FOLLOWS]
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I, Sue McNamara, have executed this Confidentiality, Non-Interference, and Invention Assignment Agreement on the date set forth below:
| Sue McNamara | |
| /s/ Sue McNamara | |
| (Signature) | |
| Date: August 9, 2023 |
| ACCEPTED AND AGREED TO: | ||
| COURTSIDE GROUP, INC. | ||
| By: | /s/ Kit Gray | |
| Name: | Kit Gray | |
| Its: | President | |
| Date: | August 9, 2023 | |
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EXHIBIT B
Annual Bonus Plan
[see attached]
See Exhibit 10.2 to this Current Report on Form 8-K
B-1
Participant Acknowledgment
The Participant acknowledges receipt of a copy of this Notice and Courtside Group, Inc.’s (the “Company”) 2023 Annual Bonus Plan (the “Plan”), dated as of August 9, 2023 (and if applicable, the Award Agreement) and represents that he or she is familiar with the provisions hereof and thereof, and hereby accepts any Awards awarded to the Participant subject to all of the terms and provisions hereof and thereof. The Participant has reviewed this Notice and the Plan (and if applicable, the Award Agreement) in their entirety, has had an opportunity to obtain the advice of legal counsel prior to executing this Notice, and fully understands all provisions of this Notice and the Plan (and if applicable, the Award Agreement). The Participant hereby agrees that all questions of interpretation and administration relating to this Notice and the Plan (and if applicable, the Award Agreement) shall be solely resolved by the Committee and the Board.
The Participant hereby acknowledges that he or she has had the opportunity to review with his own tax advisors the tax consequences of receiving this Notice and the Plan (and if applicable, the Award Agreement), and the transactions contemplated thereby, including any U.S. federal, state and local tax laws, and any other applicable taxing jurisdiction, prior to executing this Notice. Participant attests that he is relying solely on such advisors and not on any statements or representations of the Company or any of its agents or affiliates. Further, Participant hereby acknowledges and understands that he (and not the Company) shall be solely responsible for his or her tax liability that may arise as a result of receiving any Award (and if applicable, the Award Agreement).
| PARTICIPANT: | |
| /s/ Sue McNamara | |
| (Signature) | |
| Print Name: Sue McNamara | |
| Dated: August 9, 2023 |
B-2
Exhibit 10.2
COURTSIDE GROUP, INC.
2023 ANNUAL BONUS PLAN
| I. | PURPOSES OF THE PLAN |
1.01. The Courtside Group, Inc. (the “Company”) 2023 Annual Bonus Plan (the “Plan”), effective as of August 9, 2023 (the “Effective Date”), is hereby established under the Company’s 2022 Equity Incentive Plan (the “EIP”). The Plan is intended to promote the interests of the Company by creating an incentive program, which will pay out in cash, stock or both, to (i) attract and retain employees who will strive for excellence and (ii) motivate those individuals to achieve above-average results by providing them with rewards for contributions to the financial performance of one or more business segments or business units of the Company.
| II. | ADMINISTRATION OF THE PLAN |
2.01. The Plan is hereby adopted by the Company’s Board of Directors (the “Board”) to govern “Awards” (sometimes referred to in this Plan as the “Bonuses”) under the Plan and shall be administered by the Committee pursuant to the administrative authority provided to the Committee by the Board, subject to the Board’s or its compensation committee’s final approval of any such Awards. The Committee shall have the discretion to determine the portion of the Awards to be paid in cash and the portion to be paid in the Company’s shares of common stock, $0.0001 par value per share (the “Common Stock”), or restricted stock units of the Company (the “RSUs”), which shares, if applicable, will be issued under the EIP, subject to the Board’s or its compensation committee’s final approval of any such Awards and its cash and stock components and the value thereof. “Committee” shall mean a committee of the following three (3) current executives of the Company, consisting as of the date of this Plan of Kit Gray, the Company’s President, Robert S. Ellin, the Company’s Executive Chairman and a director, and Aaron Sullivan, the Company’s Interim Chief Financial Officer. If for any reason any such Committee member shall be removed or is no longer serving on the Committee, the Board shall appoint a replacement member of the Committee that will be an executive officer of the Company with direct ties to the Company’s operations.
2.02. The Bonuses that may be earned under the Plan shall be tied to the financial performance of the Company and the price of the Common Stock for the Company’s applicable fiscal year ending March 31, 2024 and 2025 (the “Fiscal Years”). The applicable performance goals for the Company for each Fiscal year are set forth on Schedule I attached hereto (the “Performance Goals Schedule”), which Performance Goals Schedule shall be subject to approval of the Board in connection with the establishment of this Plan.
2.03. The interpretation and construction of the Plan and the adoption of rules and regulations for administering the Plan shall be made by the Committee in its sole discretion, subject to any required approval thereof by the Board or its compensation committee.
2.04. The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its discretion and on behalf of the Company, to (i) designate Participants, (ii) determine the terms and conditions of Awards, (iii) interpret the Plan, (iv) prescribe, amend and rescind any rules and regulations relating to the Plan, and (v) to make all other determinations and findings, including factual findings, deemed necessary or advisable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions made in good faith by the Committee under or with respect to the Plan or any Award shall be final, binding and conclusive on all Participants. Unless otherwise expressly provided in the Plan, decisions of the Committee shall be final and binding on all parties who have an interest in the Plan.
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| III. | DETERMINATION OF PARTICIPANTS |
3.01. The following individuals (each, a “Participant”) will participate in the Plan on the following basis:
(i) The bonus potential for each of Company’s President, Chief Revenue Officer and Chief Content Officer (collectively, the “Executive Officers”) shall be allocated to the achievement of the performance criteria for each Fiscal Year as set forth in the Performance Goals Schedule, each with a specified weighting; provided, that the Committee shall have full discretion to change the weighting of the components of such performance criteria as they determine based on the recommendation of the Company’s President. Such performance criteria shall be based on achievement of specific corporate objectives relating to Company initiatives regarding revenue, Adjusted EBITDA, the Company’s stock price and the achievement of such other Company key operating metrics as the Committee determines, subject to the Board’s or its compensation committee’s final approval of any such Awards.
(ii) The bonus potential for the individuals set forth on Schedule II attached hereto shall be allocated to the (a) financial results of the Company, (b) achievement of Company key operating metrics approved by the Board of Directors based on the recommendation of the Committee, (c) achievement of such person’s approved individual goals based on the recommendation of the Committee for the applicable Fiscal Year and (d) achievement of such other objectives as the Committee determines, each with a specified weighting as determined by the Committee based on the recommendation of the Company’s President, subject to the Board’s or its compensation committee’s final approval of any such Awards. The Committee shall approve all individual goals based on the recommendation of Kit Gray, so long as he is serving as an executive officer of the Company. Awards may be granted to Participants selected by the Committee in its sole discretion; provided, that the Executive Officers shall be mandatory Participants under the Plan.
3.02. Except as provided below and except as otherwise provided in any employment agreement, employment offer letter or severance agreement between the Company (or a subsidiary thereof) and a Participant, if a Participant does not continue in the employ of the Company or one of its subsidiaries through the last business day of the applicable Fiscal Year (the “Bonus Qualification Date”), then such Participant will not be eligible to receive a bonus under the Plan. However, the following special partial payment provisions shall be in effect:
(i) Should the Participant’s employment terminate prior to the Bonus Qualification Date as a result of death or permanent disability (as defined below), then that individual or such individual’s estate shall be entitled to a pro-rated portion of the bonus such individual would have earned, based on the Company’s actual performance for the applicable Fiscal Year, had such individual continued in the Company’s employ through the Bonus Qualification Date.
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(ii) A Participant who is on a leave of absence or whose employment terminates after the start of the applicable Fiscal Year but whose leave of absence ends or whose employment recommences prior to the Bonus Qualification Date may remain eligible at the discretion of the Committee, and the Committee may provide that individual with a pro-rated portion (based on period or periods of active employment during such year) of the bonus such individual would have earned, based on the Company’s actual performance for the applicable Fiscal Year, had such individual remained continuously in the Company’s employ through the Bonus Qualification Date.
3.03 For purposes of the Plan:
A. A Participant shall be considered an “employee” for so long as such individual remains employed by the Company or one or more corporations or limited liability companies that are a subsidiary of the Company at all times during the applicable Fiscal Year.
B. Each corporation (other than the Company) or limited liability company in an unbroken chain of corporations beginning with the Company shall be considered to be a “subsidiary” of the Company, provided each such corporation or limited liability company (other than the last corporation or limited liability company in the unbroken chain) owns, at the time of determination, stock possessing more than fifty percent (50%) of the total combined voting power of all classes of stock in one of the other corporations in such chain.
C. Unless defined otherwise in any employment agreement, employment offer letter or severance agreement entitling the Participant to a full or pro-rated bonus upon a disability termination, “permanent disability” shall mean the Participant’s inability to engage in any substantial activity necessary to perform the duties and responsibilities of his position with the Company (or any subsidiary thereof) by reason of any medically-determinable physical or mental impairment which can be expected to result in such individual’s death or which has lasted, or can be expected to last, for a continuous period of not less than twelve (12) months.
D. In no event shall there be any duplication of bonus payments under this Plan and any employment agreement, employment offer letter or severance agreement between the Company (or any subsidiary thereof) and a Participant that provides such individual with a stated bonus or bonus formula for a particular year or includes an annual bonus payment as part of a severance pay formula thereunder. Accordingly, in order to avoid any such potential duplication, such Participant - in a situation implicating duplicative payments - shall only be entitled to receive the annual bonus amount to which he may otherwise be entitled under his or her employment agreement, employment offer letter or severance agreement based on the terms and conditions set forth therein and shall not be entitled to any duplicative bonus payment under the Plan. However, the accelerated vesting of any outstanding equity awards held by the Participant under any of the Company’s stock plans, including any outstanding stock options, restricted stock or restricted stock unit awards, performance stock unit awards, or the extension of any exercise periods for such stock options, shall not be deemed to constitute a bonus payment for purposes of this Section 3.03D.
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| IV. | BONUS AWARDS |
4.01. The following provisions shall govern the calculation and payment of the individual bonus awards that become payable under the Plan.
(a) The individual bonus award payable under the Plan to the applicable Executive Officer for the applicable Fiscal Year shall be payable in cash and/or direct issuances of Common Stock (or RSUs), in such amounts and based on the percentages and amounts and based on the allocation between cash and Common Stock as set forth on the Performance Goals Schedule) on the Bonus Payment Date (as defined in Section 5.01), with the bonus amount to be determined on the basis of the performance of the Company and the achievement of the performance criteria, as applicable, to which the bonus potential for that Participant has been allocated in accordance with Section 3.01. Any bonus award under the Plan payable in stock shall vest one (1) month after the Board approves such award; provided, that the Committee shall have the right to delay the settlement but not vesting of any RSUs awards under the Plan in the event such delay is more advantageous for the recipient from a tax perspective.
(b) The individual bonus award payable under the Plan to each Participant (other than the Executive Officers) for the applicable Fiscal Year shall be payable in cash and/or direct issuances of Common Stock (or RSUs) on the Bonus Payment Date, with the bonus amount to be determined on the basis of the performance of the Company and the achievement of the performance criteria or divisional or departmental goals, as applicable, to which the bonus potential for that Participant has been allocated in accordance with Section 3.01.
4.02. The following provisions shall govern the calculation of the levels at which the Company’s revenue targets and target Adjusted EBITDA (as defined in the Company’s Financial Statements (as defined in Section 4.03)) are attained for the applicable Fiscal Year and the determination of the bonus amounts based on those calculations:
(a) The actual level at which revenue for the Company has been attained for the applicable Fiscal Year will be determined on the basis of the revenues to be reported in the Company’s Financial Statements for such applicable Fiscal Year and will be calculated, for purposes of the Plan, in a manner consistent with the methodology utilized by the Committee in establishing the Company’s revenue targets.
(b) In determining the actual level at which Adjusted EBITDA for the Company has been attained, Adjusted EBITDA will be determined consistent with the Company’s methodology for calculating Adjusted EBITDA for financial reporting purposes for the applicable Fiscal Year.
(c) In the event the Company acquires other companies or businesses during the applicable Fiscal Year, the financial performance of those acquired entities shall not be taken into account in determining whether the revenue targets or Adjusted EBITDA targets for the Company for the applicable Fiscal Year have been achieved, unless otherwise determined by the Committee and approved by the Board or its compensation committee.
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(d) Should the Company sell, divest or spin off a business during the applicable Fiscal Year and the financial performance of such business was taken into account in establishing the revenue targets and Adjusted EBITDA targets set forth in the Performance Goals Schedule (or such other performance criteria), then for the purpose of determining whether the revenue targets or Adjusted EBITDA targets for the Company for the applicable Fiscal Year have been attained, the revenue and Adjusted EBITDA calculations for the Company shall be made (1) by taking into account the actual revenue and Adjusted EBITDA performance of the divested business during the portion of the applicable Fiscal Year preceding the closing of such sale, divestiture or spin off and (2) for the post-closing portion of the applicable Fiscal Year, by prorating the pre-closing actual revenue and Adjusted EBITDA performance of the divested business during the portion of the applicable Fiscal Year preceding the closing of such sale, divestiture or spin off, for the remainder of the appliable Fiscal Year.
4.03. The Committee shall, within fifteen (15) calendar days following the filing of the Company’s Annual Report on Form 10-K for the applicable Fiscal Year, determine and certify on the basis of the Company’s financial statements for such Fiscal Year as publicly reported by the Company in connection with its earnings release related to the applicable Fiscal Year (the “Financial Statements”), the actual level of attainment for revenue and Adjusted EBITDA for the applicable Fiscal Year. Any Common Stock price targets shall be determined and certified by the Committee, subject to approval of the Board or the compensation committee thereof. Such certification shall be included as part of the formal minutes of the meeting at which such determinations are made. On the basis of such certification, the Committee shall determine the actual bonus award for each eligible Participant. However, the Committee, in making such determination, shall not award a bonus in excess of the dollar amount determined for the Participant on the basis of the bonus potential established for the particular levels at which revenue, Adjusted EBITDA, Common Stock price and any other performance objective for the applicable Fiscal Year are in fact attained unless the Committee determines that it is in the best interests of the Company to do so. In the event that revenue, Adjusted EBITDA and/or Common Stock price falls between two specified levels set forth in the schedule approved by the Committee, the resulting bonus (or percentage thereof) amount shall be determined based on the lower of those two points. In no event shall the bonus awarded to any Participant exceed the maximum dollar limitation of Section 4.05.
4.04. Except as otherwise provided in Section 3.02, no Participant shall earn or accrue any right to any portion of a bonus award hereunder until the Bonus Qualification Date.
4.05. In no event shall the actual bonus amount payable under this Plan to all Participants for the applicable Fiscal Year exceed the dollar amount of One Million Six Hundred Eighty Nine Thousand dollars ($1,689,000), as may be subsequently adjusted by the terms of this Plan.
| V. | PAYMENT OF BONUS AWARDS |
5.01. The actual bonus to which each Participant becomes entitled based on the certified level at which the revenue, Adjusted EBITDA and Common Stock price targets and such other performance objectives targets determined by the Committee are actually attained for the applicable Fiscal Year shall be paid in cash and/or direct issuances of Common Stock (or RSUs), subject to the Company’s collection of all applicable federal, state and local income, employment and payroll withholding taxes and the terms of the EIP. Except as otherwise provided in Section 3.02, the bonus payments shall be made not later than the fifteenth (15th) day of the third month following the end of the applicable Fiscal Year for which the Bonus is earned and awarded, with the actual payment date to constitute the “Bonus Payment Date”.
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| VI. | GENERAL PROVISIONS |
6.01. The Committee may at any time amend, suspend or terminate the Plan, provided such action is effected by written resolution, and subject to approval of the Board. Moreover, the Committee reserves the right to amend, modify or restate this Plan as may be necessary or appropriate to avoid adverse tax consequences under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and subject to approval of the Board.
6.02. No amounts awarded or accrued under this Plan shall actually be funded, set aside or otherwise segregated prior to payment. The obligation to pay the bonuses awarded hereunder shall at all times be an unfunded and unsecured obligation of the Company. Plan participants shall have the status of general creditors and shall look solely to the general assets of the Company for the payment of their bonus awards.
6.03. No Participant shall have the right to alienate, pledge or encumber his/her interest in this Plan or any bonus payable hereunder, and such interest shall not (to the extent permitted by law) be subject in any way to the claims of the employee’s creditors or to attachment, execution or other process of law.
6.04. Neither the action of the Company in establishing the Plan, nor any action taken under the Plan by the Committee, nor any provision of the Plan, shall be construed so as to grant any person the right to remain in the employ of the Company or its subsidiaries for any period of specific duration. Rather, except as otherwise provided in any employment agreement or employment offer letter between the Company (or a subsidiary thereof) and a Participant, each employee will be employed “at-will,” which means that either such employee or the Company may terminate the employment relationship at any time for any reason, with or without cause, subject in each case to any applicable benefits that may become payable under any employment agreement or employment offer letter between such person and the Company or any of its subsidiaries.
6.05. The Plan shall be administered, operated and construed in compliance with the requirements of the short-term deferral exception to Section 409A of the Code and Treasury Regulations Section 1.409A-1(b)(4). Accordingly, to the extent there is any ambiguity as to whether one or more provisions of the Plan would otherwise contravene the requirements or limitations of Section 409A of the Code applicable to such short-term deferral exception, then those provisions shall be interpreted and applied in a manner that does not result in a violation of the requirements or limitations of Section 409A of the Code and the Treasury Regulations thereunder that apply to such exception.
6.06. No employee, officer, Participant or any other person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each Participant. Any Award granted under the Plan shall be a one-time Award which does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make available future grants hereunder.
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6.07. The Company shall be authorized to deduct and withhold from (i) any Award granted, (ii) any compensation or other amount owing to a Participant under the Plan, or (iii) with the consent of any Participant, from any other compensation owed to such Participant, any amounts required to be deducted and withheld in respect of an Award under the provisions of any applicable federal, state and local statute, law, or regulation. The Committee may condition the delivery of Shares or other benefits upon satisfaction of all applicable withholding requirements.
6.08. Nothing contained in the Plan shall prevent the Company from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.
6.09. None of the rights, benefits, obligations or duties under the Plan may be assigned or transferred by any Participant. Participation in the Plan does not give a Participant any ownership, security or other rights in any assets of the Company or its affiliates.
6.10. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide services to, the Company or any of its affiliates for any specific duration. Further, the Company or any affiliate may at any time terminate a Participant’s employment, free from any liability or claim under the Plan. The receipt of any Award under the Plan is not intended to confer any rights on the receiving Participant except as set forth in the terms of the Award.
6.11. (a) The validity, construction and effect of the Plan and any rules and regulations relating to the Plan and any Award shall be determined in accordance with the laws of the State of Delaware, without application of the conflict of laws principles thereof. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any person or Award, such provision shall be construed or deemed amended to conform to applicable laws. The Plan shall be unfunded. Neither the Plan nor any Award shall be deemed to require the Company to deposit, invest or set aside amounts for the payment of any Awards under the Plan. To the extent that any person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.
(b) All claims, disputes and other matters in question arising out of or relating to this Plan shall be resolved by binding arbitration before a panel of three arbitrators, one of whom shall be selected by the Participant’ representative, one of whom shall be selected by the Company, and the two arbitrators so selected shall select the third arbitrator, in each case selected from Judicial Arbitration and Mediation Services, Inc. (“JAMS”), in Los Angeles County, California. In the event JAMS is unable or unwilling to conduct the arbitration provided for under the terms of this paragraph, or has discontinued its business, the parties agree that the arbitrators shall be selected otherwise in the same manner set forth in this Section but substituting the American Arbitration Association, or its successor (“AAA”), in Los Angeles County, California, for JAMS. Notice of the demand for arbitration shall be filed in writing with the other party to the dispute and with JAMS (or AAA, if necessary). In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. The arbitration shall be subject to commercial rules and procedures used or established by JAMS, or if there are none, the commercial rules and procedures used or established by AAA. Notwithstanding anything to the contrary in the JAMS (or AAA) rules and procedures, the arbitration shall provide for (i) written discovery and depositions adequate to give the parties access to documents and witnesses that are essential to the dispute and (ii) a written decision by the arbitrators that includes the essential findings and conclusions upon which the decision is based. Subject to Section 6.11(c), the parties shall bear their own costs and attorneys’ fees incurred in conducting the arbitration, and shall split equally the fees and administrative costs charged by the arbitrators and JAMS (or AAA) unless required otherwise by applicable law. Any award rendered by JAMS (or AAA) shall be final and binding upon the parties, and as applicable, their respective heirs, beneficiaries, legal representatives, agents, successors and assigns, and may be entered in any court having jurisdiction thereof. Any arbitration hereunder shall be conducted in Los Angeles County, California, unless otherwise agreed to by the parties.
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(c) In the event of any arbitration or litigation concerning any controversy, claim, or dispute arising out of or relating to this Plan, the prevailing party shall be entitled to recover from the non-prevailing party reasonable expenses, attorneys’ fees and costs incurred in connection therewith or in the enforcement or collection of any judgment or award rendered therein. The “prevailing party” means the party determined by the arbitrators or court, as the case may be, to have most nearly prevailed, even if such party did not prevail in all matters, not necessarily the one in whose favor a judgment is rendered.
6.12. Except as explicitly prohibited by law, this Plan is provided at the Company’s sole discretion, and the Board or the compensation committee may modify, amend or terminate it (other than with respect to the Executive Officers) at any time, prospectively or retroactively, without notice or obligation for any reason, subject to obtaining any necessary shareholder approval as required by law, regulation or listing exchange requirement.
6.13. In the event that, after the Bonus Payment Date, discovered fraud or misrepresentation (as determined by the Board) should result in a need for the Company to restate its annual financial statements for the applicable Fiscal Year in a manner that reduces the Adjusted EBITDA, revenue or other figures that were used to determine the amount available for distribution under the Plan, then Participants who have received distributions under the Plan in excess of the amounts they would have been entitled to receive, but for the fraud or misrepresentation, shall be liable to repay such excess to the Company, without interest, on demand. Each Award (whether vested or unvested) shall be subject to such recovery or clawback as may be required pursuant to any applicable federal or other law or regulation, any applicable listing standard of any national securities exchange or system on which the Common Stock is then listed or reported or the terms of the Company’s recoupment, clawback or similar policy as may be adopted from time to time by the Board or its compensation committee, which could in certain circumstances require repayment or forfeiture of Awards or any shares of Common Stock or RSUs or other cash or property received with respect to the Awards (including any value received from a disposition of the shares of Common Stock or RSUs acquired upon payment of the Awards).
6.14. All Awards of Common Stock to be issued pursuant to this Plan shall be deemed issued and outstanding only as of the related Award date of such consideration, and except as set forth herein, no Participant shall be entitled to any dividend or distribution declared by the Company in respect of any Awards of Common Stock the record date for which is prior to such payment date or any RSUs which have not been settled on or prior to such record date. This right of a Participant to such Common Stock or RSUs shall not represent an ownership interest in the Company unless and until such Common Stock or the Common Stock underlying the RSUs is actually issued and shall not entitle any Participant to any rights common to any holder of any equity security of the Company.
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6.15. For all purposes of this Plan, the share amounts of Common Stock and RSUs shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into or exercisable or exchangeable for Common Stock), reorganization, recapitalization, reclassification, combination, exchange of shares or other like change of securities with respect to Common Stock occurring or having a record date on or after the Effective Date and prior to the related Award date.
6.16. This is the full and complete agreement between the Participants and the Company with respect to their incentive bonus compensation for the applicable Fiscal Year and the related service period through the Bonus Qualification Date. This Plan does not supersede, but is supplemental to, any provisions of any employment agreement or employment offer letter to which any of the Participants in this Plan may be a party.
6.17. As a condition of receiving any Award, each Participant agrees to execute the Participant Acknowledgment, attached hereto in the form of Schedule III, and until the Company receives a fully executed Participant Acknowledgment from such Participant in such form as reasonably acceptable to the Company, any Award issued to such Participant shall be deemed null and invalid.
[***]
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SCHEDULE I
[see attached]
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SCHEDULE II
Any employee or officer of the Company other than the Executive Officers.
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SCHEDULE III
Form of Participant Acknowledgment
The Participant acknowledges receipt of a copy of this Notice and Courtside Group, Inc.’s (the “Company”) 2023 Annual Bonus Plan (the “Plan”), dated as of ___________ ___, 2023 (and if applicable, the Award Agreement) and represents that he or she is familiar with the provisions hereof and thereof, and hereby accepts any Awards awarded to the Participant subject to all of the terms and provisions hereof and thereof. The Participant has reviewed this Notice and the Plan (and if applicable, the Award Agreement) in their entirety, has had an opportunity to obtain the advice of legal counsel prior to executing this Notice, and fully understands all provisions of this Notice and the Plan (and if applicable, the Award Agreement). The Participant hereby agrees that all questions of interpretation and administration relating to this Notice and the Plan (and if applicable, the Award Agreement) shall be solely resolved by the Committee and the Board.
The Participant hereby acknowledges that he or she has had the opportunity to review with his own tax advisors the tax consequences of receiving this Notice and the Plan (and if applicable, the Award Agreement), and the transactions contemplated thereby, including any U.S. federal, state and local tax laws, and any other applicable taxing jurisdiction, prior to executing this Notice. Participant attests that he is relying solely on such advisors and not on any statements or representations of the Company or any of its agents or affiliates. Further, Participant hereby acknowledges and understands that he (and not the Company) shall be solely responsible for his or her tax liability that may arise as a result of receiving any Award (and if applicable, the Award Agreement).
| PARTICIPANT: | ||
| (Signature) | ||
| Print Name: | ||
| Dated: | ||
12
Cover |
Aug. 09, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Aug. 09, 2023 |
| Entity File Number | 333-269028 |
| Entity Registrant Name | COURTSIDE GROUP, INC. |
| Entity Central Index Key | 0001940177 |
| Entity Tax Identification Number | 35-2503373 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 335 N. Maple Drive Suite 127 |
| Entity Address, City or Town | Beverly Hills |
| Entity Address, State or Province | CA |
| Entity Address, Postal Zip Code | 90210 |
| City Area Code | 310 |
| Local Phone Number | 858-0888 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Entity Emerging Growth Company | true |
| Elected Not To Use the Extended Transition Period | false |
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